Evaluating intergenerational persistence of economic preferences: A large scale experiment with families in Bangladesh

Shyamal Chowdhury, Matthias Sutter & Klaus F. Zimmermann

#2018-008

Economic preferences - like time, risk and social preferences - have
been shown to be very influential for real-life outcomes, such as
educational achievements, labour market outcomes, or health status. We
contribute to the recent literature that has examined how and when
economic preferences are formed, putting particular emphasis on the role
of intergenerational transmission of economic preferences within
families. Our paper is the first to run incentivized experiments with
fathers and mothers and their children by drawing on a unique dataset of
1,999 members of Bangladeshi families, including 911 children, aged 6-17
years, and 544 pairs of mothers and fathers. We find a large degree of
intergenerational persistence as the economic preferences of mothers and
fathers are significantly positively related to their children's
economic preferences. Importantly, we find that socio-economic status of
a family has no explanatory power as soon as we control for parents'
economic preferences. A series of robustness checks deals with the role
of older siblings, the similarity of parental preferences, and the
average preferences within a child's village.